Strategy description

Strategy Description

This is a Non-Directional Option Short Strangle strategy designed for intraday trading. It aims to capitalize on market volatility by selling both Call (CE) and Put (PE) options simultaneously.

Key Features

1. Delta Neutral Approach: The strategy initially establishes equal delta positions in both CE and PE options to maintain a neutral market direction bias.
2. Dynamic Adjustments: As market movements occur, the strategy dynamically adjusts positions by shifting strikes to maintain delta neutrality. This rebalancing happens when the difference between the traded instruments exceeds a predefined threshold.
3. Intraday Focus: Trades are executed as NRML orders, although they are intended to be closed by 3:20 PM.

Risk Management

1. Target: The strategy aims to book profits around Rs. 1300/- per trade.
2. Stop-Loss: A maximum loss limit of approximately Rs. 2500/- is defined.
3. Capital Allocation: The estimated entry margin for this strategy is around Rs. 2.2 Lakhs.
4. Position Sizing: Critical for risk management. This capital estimate is for entry margin only and does not include drawdown capital.

Important Considerations

1. Shared Code: Due to our policy, the Tradetron feature of Shared Code is not going to be provided by us. Please refrain from requesting it.

Disclaimer

1. This information is for educational purposes only and does not constitute financial advice.
2. We are not registered investment advisors or financial professionals.
3. Trading in derivatives involves significant risks, including the potential for substantial losses.
4. We are not liable for any losses incurred from using this strategy.
5. Users are responsible for conducting thorough due diligence and assessing their risk tolerance before implementing this strategy.